Collaboration between regulators and the financial institutions they oversee is critical as economies respond to and recover from the COVID-19 pandemic, the Reserve Bank of New Zealand (RBNZ) says.

In a speech addressing the 16th Financial Markets Law Conference in Auckland, Assistant Governor Simone Robbers called on financial institutions to continue to work constructively with regulators and stakeholders in responding to the challenges that the financial system is facing.

She says recovery will require “unified and courageous efforts”.

“We find ourselves in the midst of an extraordinary degree of uncertainty about the economic outlook and there are large looming clouds on the horizon,” Ms Robbers, who is also RBNZ GM for Governance, Strategy, and Corporate Relations, said.

“If there was ever a critical time for collaboration and understanding between regulators and the financial institutions they oversee, it is now. We all need to collectively demonstrate stability, consistency, and resilience, in order to actively support our economic recovery.

“Financial institutions have a role to play here – and should be reassessing how they are supporting the recovery and best serving their customers,” she said.

The RBNZ is reviewing 30-year old legislation and introducing changes that will strengthen its prudential regulation and supervisory powers. It expects a new law setting out the bank’s future institutional and governance arrangements to become effective from mid-2022.

Ms Robbers said the RBNZ is preparing to deploy additional monetary instruments should the need arise.

“Although New Zealand has successfully contained the virus and many parts of the economy are back up and running, we are still facing uncertain times and potential further disruptions.”